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Published by the Freedom From Religion Foundation, Inc.
Vol. 42 No. 10 December 2025

Changes to charitable giving rules in 2026

By John Friar

The One Big Beautiful Bill Act (OBBBA), signed into law this year, introduces significant new rules for the tax treatment of charitable donations, effective for the 2026 tax year.

These changes impact all donors, creating a new incentive for non-itemizers while introducing new limitations for itemizers and high-income earners.

Consult your tax advisor to understand how these changes apply to your situation and to optimize your giving strategy.

For non-itemizers (standard deduction filers)

• New universal charitable deduction: Beginning in 2026, taxpayers who take the standard deduction can claim an above-the-line deduction for cash gifts to qualified public charities.

• Limit: Up to $1,000 for single filers and $2,000 for married couples filing jointly.

• Details: Applies only to cash gifts to operating charities, such as the Freedom from Religion Foundation. Contributions to donor-advised funds (DAFs), supporting organizations or private foundations are excluded.

• Impact: Roughly 90 percent of taxpayers who do not itemize will now have a direct tax incentive to give.

For itemizers

• New 0.5 percent AGI floor: Starting in 2026, charitable contributions are deductible only to the extent they exceed 0.5 percent of your adjusted gross income (AGI). Example: If your AGI is $200,000, the first $1,000 of giving is not deductible; a $5,000 gift would yield a $4,000 deduction.

• 60 percent AGI limit for cash gifts: Permanently extended contributions to public charities, providing certainty for larger gifts.

• Planning Tip: Smaller, frequent gifts may be less tax-efficient under the new floor. Consider “bunching” donations — combining several years of giving into one tax year — to maximize deductions.

For high-income earners

• Cap on deduction value: Taxpayers in the top bracket (currently 37 percent) will see the value of itemized deductions capped at 35 percent. Example: A $10,000 donation that previously saved $3,700 in taxes will now save about $3,500.

• Strategy note: This cap, combined with the new AGI floor, makes timing and structuring gifts more important than ever. Discuss bunching and donor-advised fund strategies with your advisor.

What this means for you

Whether you give regularly or make large one-time gifts, familiarizing yourself with these new rules will help you maximize your charitable impact.

As 2025 comes to a close, consider reviewing your giving strategy now — accelerating contributions before year-end may allow you to take advantage of current rules. Please consult your tax advisor for personalized guidance.

If you have questions and would like to speak with FFRF’s financial advisor, please contact Park Capital Management at 608-440-8608 or info@parkcapitalmgt.com.

Park Capital Management, LLC (“PCM”), an SEC Registered Investment Advisor. The investment products and services offered by PCM are independent of the products and services offered by The Park Bank and are not FDIC insured, may lose value, are not bank guaranteed and are not insured by any federal or state government agency. Park Capital Management, LLC (“PCM”) is affiliated with The Park Bank.

John Friar (CFP, AIF), is partner and senior financial advisor for Park Capital Management.